(Reuters) – Video game retailer GameStop (NYSE:) reported a drop in second-quarter revenue on Tuesday as consumers turned away from traditional brick-and-mortar stores to shop online.
The company has been battling declining sales in its core business of selling new and used video game discs due to a shift toward digital downloads and game streaming. A number of customers also buy games and collectibles through e-commerce.
GameStop CEO Ryan Cohen told investors in June that the company intends to operate a smaller number of stores as competition remains intense in the gaming console market.
The company continues to face a nearly insurmountable barrier to its planned return to growth, including a continued decline in hardware sales as streaming services proliferate and its complete lack of strategy to enter new categories with growth potential, Wedbush analysts said in a note Friday.
The company reported revenue of $798.3 million in the quarter ended Aug. 3, up from $1.16 billion a year earlier. Two analysts polled by LSEG had expected revenue of $895.7 million.
Shares of the Grapevine, Texas-based company fell 1.3% in extended trading.
The stock has seen significant volatility this year after online stock influencer Roaring Kitty, whose real name is Keith Gill, returned to x.com after a three-year hiatus, with a cryptic meme that was widely seen as a bullish signal for GameStop.
He was a key player in the 2021 rally of GameStop and other so-called meme stocks, fueled by individual investors on Reddit's WallStreetBets forum.
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